Date
22 August 2017
Green bond proceeds will be used to mitigate the impact of climate change or offer environment-friendly solutions. Photo: Greenbusinessguide.com
Green bond proceeds will be used to mitigate the impact of climate change or offer environment-friendly solutions. Photo: Greenbusinessguide.com

World Bank to offer first equity index-linked green bond in Asia

The World Bank plans to sell equity index-linked green bonds in the Asia-Pacific region for the first time by the end of February or early March.

The US dollar-denominated bond, which is expected to raise the equivalent of 200 million euros (US$228 million), will be issued in several tranches and probably within a six-month period, Benjamin Biette, director of equity derivatives structuring and trading at BNP Paribas, told at a press briefing Thursday. 

BNP Paribas is the sole lead manager for the issuance.

The French financial services firm has been collaborating with the World Bank in issuing similar bonds in Europe since 2014. Biette said they have so far raised 300 million euros from the European issuance.

Green bonds are fixed-income financial instruments whose proceeds are used to mitigate the impact of climate change or offer environment-friendly solutions such as renewable energy installations and energy efficiency projects.

The World Bank, as an early and major issuer of green bonds, started selling the debt instrument in 2008. Since then, it has issued more than US$7 billion worth of green bonds in 78 transactions and 18 currencies.

Laura Tlaiye, a sustainability advisor from the capital markets department of World Bank Treasury, said a major goal of the initiative is to raise investor awareness of sustainability issues.

Up to now, green bond demand has been driven by investors from Western Europe, the United States and Japan, said Michael Bennett, head of derivatives and structured finance at the World Bank Treasury capital markets deparment.

He said the World Bank hopes that its green bonds will generate more interest from investors in Asia and stimulate their demand for products that support environment-friendly and sustainable activities.

The structured World Bank Green Bond will be linked to the performance of the Ethical Europe Equity Index, an index that includes sustainable companies based on analysis by Vigeo and Forum Ethibel.

It will be distributed in Hong Kong, Singapore and Taiwan.

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MY/JP/CG

EJ Insight reporter

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